Rod Kemp

Assistant Treasurer

14 October 1996 - 25 November 2001

Superannuation Industry (Supervision) Act 1993

Speech by

Senator the Hon Rod Kemp
Assistant Treasurer

On 8 August 2001, the Senate rejected a Bill that would have offered Australian
employees the right to choose the funds which would receive their superannuation
contributions.

The Government's policy to provide employees with this choice was an election
commitment, and the Senate has defied the Australian electorate and shown contempt
for the rights of employees.

There had been lengthy and detailed negotiations with the Democrats and an
agreement had been reached on how Choice of funds would be delivered.

However, the Democrats opposed the Bill on an unrelated matter. The Democrats
claim that Superannuation Industry (Supervision) Act 1993 discriminates
against same sex partners in relation to payments of superannuation death benefits.

The arguments of the Democrats are ill founded.

Under the Superannuation Industry (Supervision) Act 1993 as it currently
stands, same sex partners can usually access the death benefits of their partner
where they establish dependency.

Despite this, the Senate chose to reject the Bill, as explained in Senator
Kemp's speech to the Senate below.

Senator KEMP (Victoria-Assistant Treasurer) (5.56 p.m.) – I rise to
conclude the second reading debate on the
Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998.
I might say it is a disappointing conclusion to a very important public policy
issue which has been brought before this chamber. The Labor Party attitude to
choice has been well known. The Labor Party, for reasons which I think we all
know, has set its mind against choice, and I think the arguments that Senator
Sherry put forward show the utter thinness and poverty of the Labor Party position.
The Labor Party position is essentially that workers should not have choice
in relation to superannuation: the workers' funds should be directed into particular
funds whether those funds are performing well or poorly.

Senator Sherry – They are performing.

Senator KEMP – Senator Sherry, the reality, as you know, is that there
is a variety of performances.

Senator Sherry – They're very happy with them.

Senator KEMP – No-one complains about a well performing fund, but
members whose superannuation is tied up in a poorly performing fund have a lot
of reason to complain. In fact, unless this Senate can progress this debate-as
the awareness of superannuation, the importance of superannuation, moves on-a
lot of people will be asking why they are not allowed to direct contributions
to funds of their particular choice. That would be a very valid question, and
until this bill goes through the answer will be: because the Senate-and the
Labor Party in particular-was opposed to giving them choice.

Senator O'Brien – No, giving the employer the choice.

Senator KEMP – Senator O'Brien shows his complete lack of appreciation
of this issue. Senator O'Brien is the spokesperson, as Senator Sherry is, for
particular interests, but the fact of the matter is the interests which are
important in this debate are employee interests.

Honourable senators-Hear, hear!

Senator KEMP –Employee interests are the interests here, and the trade
union ALP does not speak for employee interests, I might say. What the trade
union ALP speaks for is, of course, union interests. The Labor Party's approach
to this is extremely unfortunate, to be quite frank. We can apparently allow
an individual to choose his employment, to determine where his investments are,
whether to purchase a house or not, whether he gets married or not and indeed
to determine whether he wishes to have children or not and take on huge commitments.
But, according to the Labor Party, we cannot allow that employee to choose where
his superannuation contribution should go. That is the patronising nonsense
that the Labor Party puts forward.

This debate will continue for a long period of time, but I point out to the
Labor Party that they will be constantly reminded when there are complaints
from employees about poorly performing funds and how their contributions continue
to be directed to those funds. Letters will be sent to Senator Sherry, who will
be kind enough to take particular responsibility for what has happened in this
case. Senator Sherry, I point out to you that, in your speech, you showed no
understanding of what had been proposed. What you did today will come back to
haunt you and the Labor Party.

Let me now turn to the Democrats' position. It is true that we have had a very
long period of discussion with the Democrats. It is true that those discussions
were difficult, but we stayed at the table and we kept working at it. I think
we came to a very good result- an excellent result-a result which would be welcomed
by the industry, employees and, I believe, the Australian community. It is a
great shame that, because of an issue which is quite separate from choice of
funds, the Democrats find themselves unable to proceed to implement an agreement
which they were a party to, which they worked on as hard as we did and which
developed, I believe, a very satisfactory model for choice in order to move
this debate further forward. I think it is a great pity that this has happened,
to be quite frank.

I receive a lot of letters in relation to superannuation, but I cannot recall
a letter that I have received from a same sex couple telling me that an individual,
because of the death of his or her partner, has not been able to access dependency
arrangements under superannuation. I think Senator Greig should carefully reflect
on that. I do not know whether Senator Greig has fully appreciated that. There
are a lot of issues in superannuation, Senator Greig, but I have to point out
to you that this is an issue of how an individual is affected. As I said, I
cannot recall a letter-there may have been one, but I cannot recall a letter.
I receive letters about a whole host of issues. Senator Greig, as a result of
your own interest in this matter, I have briefed you on it to try to indicate
to you how the current arrangements work. It seems to me that you have failed
to appreciate how the current arrangements work and you have taken this particular
step which has inclined your colleagues to act in this particular manner. It
is not a light matter that has occurred.

This is a very important policy; I believe that this is a very important issue
in superannuation. It provides the freedom and the choice that individuals are
quite entitled to exercise in relation to where their superannuation contributions
go. I believe that you do not understand how the superannuation system currently
works, and I think that is a great pity. The fact of the matter is that you
have persuaded your colleagues, despite all the efforts and all the work that
went into this to produce what I believe is an excellent model which will benefit
the workers of Australia-

Opposition senators interjecting-

Senator KEMP – Senator Conroy and Senator Sherry are having a little
giggle over there. As the debate goes on in the years to come, Senators, and
people complain that their contributions were stuck in particular funds-the
contributions that they were saving for their retirement-when they did not have
the freedom to direct those contributions into the areas that they wanted, we
will say that, in this important debate, it was Senator Sherry and Senator Conroy
who were laughing and giggling in the front row. It is pathetic. It shows, frankly,
the paucity of the Labor Party position. It shows you the authoritarian nature
of the Labor Party. The one thing that the Labor Party hates is choice. Whatever
public policy you get into, the one thing that the Labor Party cannot take is
choice. This is another example where the Labor Party has shown its true colours.

I think it is a great pity that the Democrats have not felt that they are able
to proceed with an agreement which we negotiated in good faith. I think the
model which we produced, after many tortuous hours, was a good model. It was
good for employers, it was good for employees and it was good for the industry.
It had a lot of advantages; it set up arrangements for proper consultation and
monitoring; it made sure that there was an education program that would properly
inform employees. It achieved all those things and it provided time for the
scheme to be brought in so that employers, employees and the industry would
have time to adjust. But that has not eventuated. I have to say that, to me,
that is a great pity, because this was an opportunity for the Senate to grasp
an important public policy which could have an important effect on superannuation
for the good of this nation. It happened for reasons which I think have been
explained and, as I said, it is a great pity.

I understand that Senator Allison and I negotiated in good faith. I did not
doubt the commitment of Senator Allison. It is true that Senator Allison has
been unequivocal about this issue. Nonetheless, I think we went to the table
in good faith, we negotiated in good faith, we reached an agreement in good
faith and, for reasons which have now transpired, this agreement now cannot
be put into effect. To me, that is a great pity, to be quite frank. It is a
great pity not because of the effort that people might feel is wasted, but it
is a great pity for Australian employees.

I hope that in a comparatively short period of time we will be able to move
forward on this issue. I think that the model that has been established is the
way to move forward. Every party has to examine its own conscience on this and
every senator has to examine his or her own conscience. A very bad decision
has been made, in my view-not based on the facts, not based on how superannuation
in the vast majority of schemes works, but based on an ideological view that
was going to be proceeded with regardless of the facts of the matter. As I said,
this model would have provided real choice for employees.

Senator Sherry got up and said what a dangerous thing this was. I was in Western
Australia recently, where they have choice and it works extremely well. It is
not an issue with employees-they like it-and it is not an issue with employers.
It works.

Senator Sherry – Quote some evidence, Rod.

Senator KEMP – You have not been over there, Senator Sherry-you have
been thinking too much about the surcharge. You have never been able to get
your mind off the surcharge. Let me tell you: it works well. One of the options
that is available in that scheme is unlimited choice-exactly one of the options
which is available in the scheme which we have put before this chamber.

What has happened here today is a disappointment. Those senators in the Labor
Party were always predictable on this. The Labor Party never came to the table
with any sign that they were prepared to think constructively. The Labor Party's
position is: `We tell you, the employee, where to put your money, and don't
you dare protest.' That is exactly what the Labor Party's position is. That
is the contempt with which the Labor Party continue to treat workers. That is
your position and it is a disgraceful position, in my view. Frankly, Senator
Sherry, the Labor Party, Mr Simon Crean and Mr Kelvin Thomson will find out
that a lot of people in the coming months and years will be extremely unhappy
as a result of this decision that the Labor Party have made.

I have been through the actions of the Democrats. Again, Senator Greig, I am
very happy to take you through exactly what happens in this area, and that would
explain to you why I do not receive letters on this issue about people who are
adversely affected. What have you achieved? You have prevented large numbers
of Australian workers having the right to determine where their contributions
go-that is what you have achieved. Senator, if you look at how superannuation
works for the vast majority of funds, I do not believe that the concerns that
you have are at all justified.

The government will continue to want to progress choice in superannuation.
We are always open to negotiation and discussion. We have given up on the Labor
Party. The Labor Party has no policy.

Senator Conroy – You won't even talk to us.

Senator KEMP – What is the Labor Party's policy on superannuation?
`Oh, we'll have a review after the election.' Five years of effort and they
came up with this brilliant policy: `We'll have a review after the election.'
What a truly pathetic effort; and Senator Sherry, because you spend so much
of your time on superannuation, you must bear a heavy responsibility for that.
I conclude the debate, but I make the point once again that this government
will certainly continue to pursue the policy of choice in the interests of Australian
workers.